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Coca-Cola Enterprises Inc (NYSE:CCE)
Beneish M-Score
-2.34 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Coca-Cola Enterprises Inc has a M-score of -2.34 suggests that the company is not a manipulator.

CCE' s 10-Year Beneish M-Score Range
Min: -2.85   Max: -1.94
Current: -2.34

-2.85
-1.94

During the past 13 years, the highest Beneish M-Score of Coca-Cola Enterprises Inc was -1.94. The lowest was -2.85. And the median was -2.53.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Coca-Cola Enterprises Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.2109+0.528 * 1.0001+0.404 * 0.9622+0.892 * 1.0522+0.115 * 1.1025
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9389+4.679 * -0.0157-0.327 * 1.0921
=-2.34

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,199 Mil.
Revenue was 2333 + 1870 + 2032 + 2174 = $8,409 Mil.
Gross Profit was 846 + 650 + 688 + 787 = $2,971 Mil.
Total Current Assets was $3,295 Mil.
Total Assets was $10,168 Mil.
Property, Plant and Equipment(Net PPE) was $2,304 Mil.
Depreciation, Depletion and Amortization(DDA) was $302 Mil.
Selling, General & Admin. Expense(SGA) was $1,961 Mil.
Total Current Liabilities was $2,866 Mil.
Long-Term Debt was $4,053 Mil.
Net Income was 198 + 115 + 135 + 289 = $737 Mil.
Non Operating Income was 1 + -1 + -3 + 1 = $-2 Mil.
Cash Flow from Operations was 146 + 67 + 236 + 450 = $899 Mil.
Accounts Receivable was $1,726 Mil.
Revenue was 2156 + 1850 + 1916 + 2070 = $7,992 Mil.
Gross Profit was 753 + 634 + 662 + 775 = $2,824 Mil.
Total Current Assets was $2,652 Mil.
Total Assets was $9,126 Mil.
Property, Plant and Equipment(Net PPE) was $2,212 Mil.
Depreciation, Depletion and Amortization(DDA) was $324 Mil.
Selling, General & Admin. Expense(SGA) was $1,985 Mil.
Total Current Liabilities was $2,416 Mil.
Long-Term Debt was $3,270 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2199 / 8409) / (1726 / 7992)
=0.26150553 / 0.21596597
=1.2109

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(650 / 7992) / (846 / 8409)
=0.35335335 / 0.35331193
=1.0001

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (3295 + 2304) / 10168) / (1 - (2652 + 2212) / 9126)
=0.4493509 / 0.46701731
=0.9622

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=8409 / 7992
=1.0522

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(324 / (324 + 2212)) / (302 / (302 + 2304))
=0.12776025 / 0.11588642
=1.1025

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1961 / 8409) / (1985 / 7992)
=0.23320252 / 0.24837337
=0.9389

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((4053 + 2866) / 10168) / ((3270 + 2416) / 9126)
=0.68046814 / 0.62305501
=1.0921

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(737 - -2 - 899) / 10168
=-0.0157

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Coca-Cola Enterprises Inc has a M-score of -2.34 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Coca-Cola Enterprises Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.0110.93191.0951.06910.93851.15811.71950.83111.06081.0512
GMI 1.01631.01181.01851.03561.03340.96061.03961.00991.01681.0321
AQI 0.99180.98950.90990.99260.55690.99091.59310.95251.0131.0386
SGI 1.04781.03021.05871.05721.04160.99260.31021.23380.97321.0186
DEPI 1.03890.97471.0460.96310.94661.01031.34090.84460.9981.0893
SGAI 1.01640.99340.99120.96370.99061.01750.79350.96921.01470.9698
LVGI 0.93890.96911.09390.94351.49250.96180.62221.12611.06861.0921
TATA -0.0387-0.04370.0077-0.01310.1044-0.0645-0.0233-0.0121-0.0287-0.0168
M-score -2.58-2.71-2.35-2.39-2.34-2.66-2.08-2.55-2.59-2.48

Coca-Cola Enterprises Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.52170.95111.09691.06081.01840.99841.10611.05121.07621.2109
GMI 1.03851.01381.01291.01681.01771.02541.03161.03211.02341.0001
AQI 0.97940.98560.99761.0131.00621.01561.01211.03860.99340.9622
SGI 0.74161.04960.98220.97320.96820.98561.00711.01861.02341.0522
DEPI 0.2762-0.24950.97850.9980.99361.03611.07941.08931.10661.1025
SGAI 0.86570.96210.98671.01471.04581.02971.01440.96980.91930.9389
LVGI 1.10481.11791.08441.06861.14011.12591.13351.09211.0831.0921
TATA 0.0031-0.0139-0.0215-0.0287-0.0522-0.0283-0.0236-0.0172-0.0165-0.0157
M-score -2.30-2.72-2.53-2.59-2.78-2.65-2.50-2.48-2.46-2.34
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